This map shows the site of a proposed Hilcorp well pad off the Old Sterling Highway. (Illustration provided)

This map shows the site of a proposed Hilcorp well pad off the Old Sterling Highway. (Illustration provided)

Borough proposes oil and gas leases in Anchor Point

Lower Kenai Peninsula residents have a chance to learn about proposed oil and gas leases on Kenai Peninsula Borough land in the Anchor Point area at an upcoming Anchor Point Advisory Planning Commission meeting

At the Oct. 23 Kenai Peninsula Borough Assembly meeting, the assembly introduced an ordinance to lease parcels in the Anchor Point area to Hilcorp for oil and gas subsurface rights. Assembly member Willy Dunne, who represents Anchor Point and other parts of the lower Kenai Peninsula, pulled the ordinance from the consent agenda for further discussion.

It will be on the table for discussion at Anchor Point’s planning commission meeting at 7 p.m. Wednesday, Nov. 7, at the Anchor Point Chamber of Commerce.

Ordinance 2018-34 would lease oil and gas rights at a minimum 12.5 percent royalty. One of the lease sites is near Chapman Elementary School on land now used as a solid waste and recycling transfer site. Called the Sea View Pad, the proposed Hilcorp well site is on land off the Old Sterling Highway.

“I wanted to let folks know, especially folks down in the Anchor Point area, that there is borough code that requires that leases such as this would not include surface entry,” Dunne said at the meeting. “It’s sub surface only, even though the lease language does make reference to surface activities. One of the concerns I heard from people was that perhaps we need to negotiate a better deal on this.”

In a follow-up interview, Dunne said borough Mayor Charlie Pierce told him he would like to negotiate a better royalty percentage.

Dunne said he’s received many questions about the ordinance and said the public deserves a little more information.

“It caught people by surprise,” Dunne said. “It went through the state process, but of course without Coastal Zone Management authority anymore, the public isn’t often aware of what’s going on.”

The 12.5 percent royalty is the minimum required under borough code.

The ordinance comes up for a public hearing at the Nov. 20 assembly meeting. Assembly member Kenn Carpenter said a hearing would be set up in the Homer area before the 20th.

More details on the Anchor Point Advisory Planning Commission meeting will be posted soon on the KPB Planning Department page.

Reach Victoria Petersen at vpetersen@peninsulaclarion.com. Reach Michael Armstrong at marmstrong@homernews.com.

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